Supply Chain Postponement Delivers Results
Supply Chain Postponement Delivers Results
As customers are becoming accustomed to advanced technologies and interactive media, their increasing demands for high customization levels without any delays and without any additional costs are creating terrorizing challenges for businesses. As companies attempt to provide the products at reduced costs, quality suffers and makes the products unfit for use after a short period of time, thus increasing the inventory costs of obsolete products.
To battle costs while trying to improve efficiency, render satisfactory products and sustain sufficient inventory, managers are trying to implement unique and flexible solutions. Postponement is one such strategy that ensures products are developed generically and can be customized according to the customer's demand, thus improving customer service and reducing inventory costs.
The implementation of postponement definitely has its advantages. It helps businesses to respond promptly to changing demands and to remain competitive without any undue pressure on costs. Customers are offered a wider range of customized products. As the products are generically designed, companies are relieved of worrying about stocking outdated products in their inventory. Resources are planned and allocated in an orderly manner, as forecasting of demands is no longer required to help improve savings on inventory costs. Since the products have generic components it is easier and faster to make the finished products.
Despite such immense benefits, businesses are skeptical about using the postponement strategy because of concerns over the risks inherent in their inability to forecast and cater to customer's demands for higher customization levels. To achieve success with the postponement model the products have to be designed in alignment with the business process and without any complex implementation programs. Both external and internal collaboration and high visibility are a must across the entire supply chain process.
To make postponement successful, businesses need to implement technology that can help them redesign their business process and increase visibility in the supply chain. This can help authorities determine the effect in other areas caused by changes in a particular section and provides the decision makers with numerous options for postponement, ultimately helping them select the best one.
To overcome the complex challenges associated with postponement, many companies are engaging in supply chain outsourcing. These external vendors have specialized processes involving packaging, labeling, assembling, delivering and manufacturing as per customers' demands.
To achieve positive supply chain postponement results companies need to ideally build standard products that can be customized at the right moment. For this a high level of collaboration is required. It is time for organizations to implement changes in their process and take risks if they want to remain in the competition without suffering any losses.
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